A lot of students these days are consolidating their student loans. It has been seen that federal student loan consolidation means lower rates of interest and lower monthly payments for the student. A great advantage also is that only one payment has to be made instead of several payments to various creditors. Consolidation also gives you payment incentives and new or renewed deferments.
There usually is no minimum loan amount that makes you eligible for consolidation. On top of that, which of the loans you want to include in your consolidation scheme is entirely up to you. Another advantage of loan consolidation is that a student can consolidate his undergraduate loan while yet in graduate school.
An important clarification regarding federal student loan consolidation though, is that loans obtained from private financial institutions like banks and credit unions cannot be included in your consolidation scheme. It is only federal loans that qualify.
Dont consolidate unless necessary
It is important that you do all your calculation carefully because the last thing you want is for your monthly payments to increase after consolidation. This does happen at times and so it is essential that you do your homework extremely well and are aware of all the technicalities and hidden costs beforehand in order to make the right decision.
A lot of federal student loans have low interest rates anyways and so it doesnt always make sense to consolidate your student loans. Consolidate your loan only if you are absolutely sure that it will be beneficial to you. The biggest advantage of consolidation must not be forgotten though. It reduces your hassles because you no more have to worry about paying several different creditors every month.
Which loans can you consolidate?
There are many kinds of federal student loans that qualify for consolidation. Given below are the ten types of federal student that do qualify.
1. Perkins Loans
2. Stafford Loans
3. Federal Direct Loans
4. Federally Insured Student Loans
5. Federal Parent Loan
6. National Direct Student Loans
7. Nursing Student Loans
8. Health Education Assistance Loans
9. Health Profession Student Loans
10. Auxiliary Loans To Assist Students
With research facilities like the Internet available to you, getting the right information really shouldnt be a problem. Once you have the required information, you can take a decision as to whether you should consolidate your federal student loan or not. All that you have to keep in mind is that each students case is different and so consolidation should be decided upon case by case. It is not the case that every student would benefit from federal loan consolidation, but it is certainly something that you, as a student, should seriously consider.
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